Analyzing risk in PPP provision of utility services: A social welfare perspective

Moore, Mark A.; Boardman, Anthony E.; Vining, Aidan R.

doi:10.1016/j.jup.2017.08.008

Cited by 28 publications

(22 citation statements)

References 34 publications

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“…In D&C contracts, the risks associated with designing and building (construction) infrastructures are transferred to the private sector; in DBFM, additionally, the maintenance risks are also transferred (Culp, 2011). It has been argued that transferring as much risk as possible leads to efficiency gains-the bundling of design and build with maintenance leads to better designs that will minimize maintenance costs (Martimort & Pouyet, 2008;Moore et al, 2017). Because improved designs may require learning new procedures for project construction and maintenance that may actually increase costs (Martimort & Pouyet, 2008), we expect to find DBFM contracts mainly in larger projects.…”

Section: Dbfm Versus Dandc: Cost Performancementioning

confidence: 99%

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Do public–private partnerships achieve better time and cost performance than regular contracts?

Verweij

Meerkerk

2020

Public Money & Management

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Infrastructure development with public-private partnership (PPP) contracts has been claimed to lead to better performance compared to regular contracts. However, the empirical evidence for this claim is weak. The authors assessed the difference in the actual performance of Dutch infrastructure PPP projects (design-build-finance-maintain: DBFM) compared to regularly procured projects (design-and-construct: D&C). DBFM projects demonstrated significantly better cost performance. IMPACT Public-private partnerships (PPPs) have been widely used for the development and management of transport infrastructure, such as highways, railways, and waterways. However, hard evidence that PPPs perform better than regularly procured projects is lacking. Existing evidence tends to rely on anecdotal and perceptual data. This paper provides policymakers and managers with real information about the actual performance and benefits of PPPs.

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Section: Dbfm Versus Dandc: Cost Performancementioning

confidence: 99%

“…Because governments have clear financing cost advantages over private consortia (governments can normally borrow money at lower interest rates) (Leruth, 2012;Moore et al, 2017), we expected to find DBFM contracts mainly in larger projects. DBFM requires a certain project size to be a viable option.…”

Section: Dbfm Versus Dandc: Cost Performancementioning

confidence: 99%

Do public–private partnerships achieve better time and cost performance than regular contracts?

Verweij

Meerkerk

2020

Public Money & Management

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“…With regard to the risk allocation in PPP projects, a general principle is that the risk should be allocated to the party who can assess and manage it best (Irwin, 2007), based on which a number of risk allocation schemes (Bing, Akintoye, Edwards, & Hardcastle, 2005;Hwang, Zhao, & Gay, 2013;Ke, Wang, Chan, & Lam, 2010;Ng & Loosemore, 2007;Roumboutsos & Anagnostopoulos, 2008) have been developed through questionnaire survey and case studies. Besides, quantitative methods, such as real options (Buyukyoran & Gundes, 2018;Liu & Cheah, 2009;Shan, Garvin, & Kumar, 2010), fuzzy synthetic evaluation model (Xu, Yeung, J. F. Chan, A. P. Chan, Wang, & Ke, 2010), artificial neural networks model (Jin & Zhang, 2011), fuzzy analytical hierarchy process model (Khazaeni, Khanzadi, & Afshar, 2012), principal-agent model (Moore, Boardman, & Vining, 2017) and bargaining model (Li, X. Wang, & Y. Wang, 2016;Medda, 2007) were adopted to investigate risk allocation tools for PPP projects.…”

Section: Introductionmentioning

confidence: 99%

Early Termination Compensation Under Demand Uncertainty in Public-Private Partnership Projects

Song

Jin

et al. 2018

International Journal of Strategic Property Management

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In the early termination of public-private partnership (PPP) projects, compensation is considered a core issue that greatly affects the interests of the government and the private sector. To address the early termination that is frequently caused by government default or voluntary buyback, this paper proposes an ex-ante compensation mechanism using the cumulative probability that a given demand could be realized to determine early termination compensation under demand uncertainty. By splitting the compensation into two parts, the base compensation could be the minimum compensation for the private sector, while the additional compensation is considered a reasonable allocation of future booming demand. The predetermined compensation criterion ensures a smooth transfer of the early terminated project, which not only benefits the government from being overcharged, but also enables the private sector to gain a reasonable compensation for the remaining concession period.

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“…The PPP model has been widely used in many countries for different public infrastructure projects, such as highway projects, waste‐to‐energy programs, pension community construction projects, and wastewater treatment projects . Although different projects have different characteristics, they have some basic indicators for selecting partners in common.…”

Section: Methodsmentioning

confidence: 99%

Private‐sector partner selection for public‐private partnership projects of electric vehicle charging infrastructure

Zhang

Zhao

Kan³

2019

Energy Science & Engineering

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Public‐private partnership (PPP) models, which can mitigate the deflection of charging facilities, have been introduced for electric vehicle charging infrastructure (EVCI) projects. Private‐sector partner selection is a significant step to ensure the success of EVCI‐PPP projects, but it has been rarely studied. This paper therefore identifies selection criteria for private partners in EVCI‐PPP projects and assesses the alternatives using an extended multicriteria operation and compromise solution (VIKOR) method. A partner selection indicator system is established through three development processes, and the factors are categorized into five factor packages: basic ability, management ability, performance of previous performance and credit performance, performance of projects, and sustainable development. These factors include 22 subcriteria. An extended VIKOR‐based method incorporating an intuitionistic fuzzy set is developed to select an optimal private partner. A case study is used to verify the effectiveness and rationalization of the proposed approach. Three potential candidates, P1, P2, P3, are evaluated and ranked according to their evaluation scores, and the results show that P1 is the best partner solution. Relevant charging infrastructure project experience, technical level in charging facilities, and financing plan are the top three criteria for choosing appropriate partners for EVCI‐PPP projects. This study provides a comprehensive evaluation framework for the government to select suitable private‐sector partners to accelerate the sustainable development of charging facilities.

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Analyzing risk in PPP provision of utility services: A social welfare perspective

Cited by 28 publications

References 34 publications

Do public–private partnerships achieve better time and cost performance than regular contracts?

Do public–private partnerships achieve better time and cost performance than regular contracts?

Early Termination Compensation Under Demand Uncertainty in Public-Private Partnership Projects

Private‐sector partner selection for public‐private partnership projects of electric vehicle charging infrastructure

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